The $700 billion Inflation Reduction Act will be voted on by the House of Representatives on August 12.
This comes despite the lack of Congressional Budget Office (CBO) ratings, which makes it unclear what the bill’s full financial effects would be.
Sens. Joe Manchin and Chuck Schumer informed on July 27 that they reached a compromise to support a $700 billion budget resolution to generate $725 billion in new income for the federal government and cut the deficit by $292 billion per annum.
The law, officially known as the Inflation Reduction Act, was the result of a year of stressful discussions, concessions, and disappointment for Democrats.
Legislators have traditionally awaited the independent CBO’s comprehensive economic analysis of proposed legislation; this provides a clearer view of the bill’s long-term impacts on federal income, expenses, deficit spending, and the national debt.
The CBO, however, only had time to issue preliminary, incomplete predictions concerning the bill’s long-term consequences on the American economy, due to the Inflation Reduction Act’s broad scope.
Despite the absence of a CBO score, Democrats appear to be on pace for a vote on the package sometime in the afternoon of August 12.
QUESTION OF THE DAY: The Democrats' new social spending bill, the Inflation Reduction Act, has a price tag of $700 billion.
Do you think government spending is out of control? https://t.co/ExS1oFwGb0
— The National Desk (@TND) August 3, 2022
Since the law has already been approved by the Senate, if it is approved by the House, it will be delivered directly to President Biden, who promised to sign it.
The bill’s $700 billion in new expenditures includes an allocation of $80 billion for the Internal Revenue Service, which is six times the agency’s budget.
It also includes a number of new climate policies and tax breaks for people and businesses who switch to renewable sources of energy and low-emission cars. New levies are also included in the law.
The most significant of these is a 15% minimum tax on businesses with annual revenue of over $1 billion.
Despite the fact the tax rate for U.S. businesses is currently set at 21%, many gigantic corporations really pay a rate that is much lower once deductions, exemptions, and other tax code-related strategies are taken into consideration.
It is debatable how this new tax obligation will affect worker earnings and consumer pricing.
However, in a discussion with The Epoch Times, Preston Brashers, a senior tax policy expert at The Heritage Foundation, projected the new tax will result in a jump in prices and a slowing or stagnation of wage growth.
Pelosi Probably Has the Support
💡Let's solve inflation with more spending & government expansion! The inflation reduction act arms the IRS, funds Bill Gate's climate control projects, adds price controls, and increases taxes. The 700 billion bill falls on Americans. https://t.co/lWB7MhOQFW
— Don (@crediblebytes) August 10, 2022
Democrats also included a 1% excise tax on business stock buybacks, a tactic frequently employed by retirement account administrators to boost customers’ retirement holdings, as part of a deal with Sen. Kyrsten Sinema to earn her support.
The new healthcare regulations established by the law have drawn criticism as well.
The plan would force prescription medication producers, who currently have no option but to enter discussions or pay a hefty 95 percent excise tax as a penalty, to bargain with Medicare Part D for the very first time yet.